Global warming, intermediary market power, and agricultural exports: Evidence for cotton and cashew nuts in West Africa

This research aims at analysing the extent to which climate change affects cotton and cashew nuts production and exports in West African countries in the presence of intermediary market power. To that end, the paper uses a combination of approaches to calibrate a price endogenous regional bio-economic optimisation model and handles uncertainties inherent to future socioeconomic scenarios through Monte Carlo simulations. The results show that the effects of climate change on cotton and cashew nuts land use are mixed under the two simulated climate change scenarios. In fact, the effects vary across countries, ranging from experiencing only a decline, or only an increase to both a decline and an increase in land use. Similarly, the effects of climate change on the quantities of cotton and cashew nuts exported are also mixed, with the positive effects being more pronounced for cotton. Simulations of reductions in the market power exerted by intermediaries on cotton producers also show that such a scenario could to some extent mitigate the negative effects of climate change on cotton exports for some countries. Therefore, actions that include corrections to cotton market imperfection could be undertaken to mitigate the negative effects of climate change on cotton and cashew nuts production in West Africa.